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Economy Watch Thread

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15 hours ago, hegemony said:

The 2020 budget deficit will come in at least 2x higher than the worst annual deficit subsequent to the 2008 financial meltdown.

 

There was a hard lesson learned during that crisis that one shouldn't worry so much that one's house may be on fire if their are live bodies inside that must be tended to first.  Maybe we need to learn that there are still limits that apply ...

 

This is the first time I've felt totally unprepared to even contemplate about what's right and what's wrong with government spending in the moment.  I can't even fathom what the magnitude of the current numbers translate to in terms of future implications.

 

In 2008-2009, I had confidence in the underlying economy and it's potential to grow it's way out of the budget deficit once recovery was in hand.   I have tremendous belief in the soundness of the core economy now.  However, I have grave concerns about how current economic and political uncertainties may decimate that strength.

 

Perhaps the most unsettling statistic is that during a period of extended economic growth during the latter half of this decade, annual budget deficits have steadily increased.  Without any desire or intent to spin into political turf. that's a clear signal that we suffered underlying structural budget problems well in advance of COVID-19, making the current situation all the worse.  (DO NOT take this into political commentary ... it's sufficient to express concern that the situation exists and we have to deal with it.)

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1 hour ago, hdporter said:

 

 

This is the first time I've felt totally unprepared to even contemplate about what's right and what's wrong with government spending in the moment.  I can't even fathom what the magnitude of the current numbers translate to in terms of future implications.

 

 

the spending is out of control especially when compared to the unfunded "tax cuts" which helped balloon the deficit and national debt.

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37 minutes ago, hegemony said:

the spending is out of control especially when compared to the unfunded "tax cuts" which helped balloon the deficit and national debt.

The fallacy of giving rich the money to create economy has been proven to be the worse, yet most still believe in it. If you ask around more than 50% of the 99% of the lower wealth class still believe that the economy is running due to the top 1% and yet they wait for paychecks to get by. That is the saddest part of all.

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3 hours ago, hegemony said:

 

Did you predict TARP would be an unmitigated disaster as well?

 

I'll acknowledge that anytime the Fed intervenes into the private lending system their is a downside risk (namely, that the push to lend leads to unsound debt).  However, that consumer lenders are getting a little gun shy where it comes to marginal credit risks is apparent from posts here.  No doubt, the situation is doubly the case on the commercial side.  Anytime weaker, but still creditworthy, risks are being squeezed by lending tightening during an economic downturn, it's critical that the Fed step in to ensure markets remain liquid.  The alternative is to embrace an accelerated pace of the burgeoning recession.

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Posted (edited)
50 minutes ago, hdporter said:

 

Did you predict TARP would be an unmitigated disaster as well?

 

I'll acknowledge that anytime the Fed intervenes into the private lending system their is a downside risk (namely, that the push to lend leads to unsound debt).  However, that consumer lenders are getting a little gun shy where it comes to marginal credit risks is apparent from posts here.  No doubt, the situation is doubly the case on the commercial side.  Anytime weaker, but still creditworthy, risks are being squeezed by lending tightening during an economic downturn, it's critical that the Fed step in to ensure markets remain liquid.  The alternative is to embrace an accelerated pace of the burgeoning recession.

You have an odd way of interpreting the word "fun."

 

ETA: so we're all Keynesians now...

 

 

Edited by hegemony

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1 hour ago, hegemony said:

You have an odd way of interpreting the word "fun."

 

ETA: so we're all Keynesians now...

 

 

 

Your suggestion of "fun" smacks heavily of "time to pop the corn and enjoy the train wreck" ;)

 

FWIW, I'm definitely standing on my "monetarist" soap box today!

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40 minutes ago, hdporter said:

 

Your suggestion of "fun" smacks heavily of "time to pop the corn and enjoy the train wreck" ;)

 

FWIW, I'm definitely standing on my "monetarist" soap box today!

I like pop corn.

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4 hours ago, hegemony said:

 

OMG, check out their mall property locations: 

https://www.cblproperties.com/all-properties

 

The location list looks like the itinerary I imagined comprised the Everly Brothers Final Tour (based upon a poster I saw, it surely was captioned "The Back from the Dead Tour")  ... or so I remarked at the time.  (not particularly humorous, in hindsight, since one of the brothers passed not too long after :( )

 

These are towns that graduating high school kids fled with desperation ...

Hell, Branson isn't on the list and I imagine it's because it was simply too progressive!

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Share of [Mortgage] Loans in Forbearance Falls for 6th Straight Week

 

Ginnie Mae is almost entirely FHA and VA, with FHA representing the majority.

 

VA tracks much closer to Conventional as far as loan performance, so the extent of the bloodbath that is happening with subprime FHA loans is masked when the info is presented this way. 

 

Total loans in forbearance decreased by 6 basis points relative to the prior week: from 7.80% to 7.74%.

  • By investor type, the share of Ginnie Mae loans in forbearance increased: from 10.26% to 10.27%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 5.64% to 5.49%.
  • The share of other loans (e.g., portfolio, and PLS loans) in forbearance increased relative to the prior week: from 10.41% to 10.53%.

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Oh come on, of course utility bills are going to go up: we are all at home all of the time!

 

Normally I would be in an office taking in the AC and using their electricity. Now I get to pay for everything. This, on top of having to take a whopping pay cut so that I can have the dubious pleasure of continuing to have a job. Oh and let's not forget that the home office deduction no longer exists!

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42 minutes ago, Achillia said:

Oh come on, of course utility bills are going to go up: we are all at home all of the time!

 

Normally I would be in an office taking in the AC and using their electricity. Now I get to pay for everything. This, on top of having to take a whopping pay cut so that I can have the dubious pleasure of continuing to have a job. Oh and let's not forget that the home office deduction no longer exists!

I've been known to take ALL of my rechargeable gear to my office... one day I had a drill, two laptops, and a couple of flashlights plugged in. That was back in the day when I hadn't had a COLA increase in years and I was more spiteful.

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Price of gas is dropping again...my usual Houston-area station had gradually crept up to $1.859 for regular unleaded (fifty cents more for premium) but has been coming back down and was at $1.629 last night.  This morning, a north Houston Shell that had been at $1.659 for a few weeks came down to $1.599.  I don't usually fill up there because they had an insane spread to the premium grades that made it impossible to derive the card-related benefit for repeat fill-ups. 

 

Diesel as generally still been in the $1.929 to $1.979 range with a few truck stops eclipsing two bucks. 

 

The ONLY time in recent months I have seen regular unleaded over two bucks was this weekend's trip to/from Austin when the always-overpriced stations in Brenham were at $2.029 and $2.039.  I have always wondered about their pricing simply because they don't have a stronghold on the Brenham market and it isn't like they are the only gas one finds for miles...

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Share of Mortgage Loans in Forbearance Decreases for Seventh Straight Week to 7.67%

 

Subprime FHA loans continue to go in the wrong direction.  If you are flushing mortgage insurance premiums down your toilet every month, this is what you're funding.

 

The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the eighth week in a row to 5.41% - an 8-basis-point improvement. Ginnie Mae loans in forbearance increased by 1 basis point to 10.28%

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